tv Key Capitol Hill Hearings CSPAN October 10, 2014 6:00am-7:01am EDT
pension funds have 80 trillion dollars in assets. less than 1% of pension funds are allocated directly to countries. it's a lack of bankable projects, a sufficient supply of commercially viable and sustainable infrastructure investments. this is a new concept that can be piloted quickly and does not require tens of billions in new resources. the aim is to crowd in the tens of billions or more potentially that's now sitting on the sidelines waiting for good investments, and we can bring those investments off the sidelines by addressing issues like risk. my third topic involves the fight against cholera in haiti. today we're pledging $50 million to help improve access to safe water and sanitation for all haitians aimed at preventing water borne diseases. later i'll be sharing a conference with the united ations and the secretary
general, ban ki-moon, with the objective of raising even more donor funds. thank you very much. now i'll take your questions. >> please identify yourself and your organization. the woman in the back there. microphone. >> thank you. the im, i have a question, infrastructure investment bank. what is your comment on the model compared to the existing institution such as the world bank and the a.d.p., and do you think they can cooperate effective with the world bank, but without to avoid, also
avoid fragmentation? >> well, my understanding is the a.i.b., the business model is still being discussed. there are many different issues that are still to be worked out. i've made it very clear from the very beginning of discussions that we think that we can be a very, very strong partner for a.i.b. for example, we have 70 years of experience doing project preparation, helping with implementation, supervision, and also we think that the safeguards that we bring to the table in any project will be helpful in reducing risk for investors. i mean, this is really a major concern of all investors that they do not want to -- they do not want to suffer the reputational damage that will happen if environmental and social safeguards are not respected. so i think that we've already been in very close discussions with leaders in the new development bank, and our
intention, our intention and our expectation is that we'll be working very closely. our enemy is poverty, and just as i said, there's such a need for more investment and infrastructure that any organization that's focused on investing and infrastructure to fight poverty is our friend. > right there. > thank you. the world bank has progressively with draun from infrastructure over a long period, and a great deal of the expertise that used to exist in the bank, everything from engineering and finance presumably is no longer there. so does this mean that the bank is now going to stock up again with the kind of people who specialize in infrastructure? >> well, we still have quite a
large portfolio in infrastructure projects. i think it's a relatively smaller proportion of the overall portfolio than it was say decades ago. on the other hand, we did over $60 billion in business last year. as we scale up our global practices, our groups that are specifically focused on particular areas, if we need to bring in more experts on roads and energy and transport, we'll do so, but we are already doing quite a bit of work in infrastructure. the platform, though, is very important in a new sense, that as we start putting projects together, it will be people from the world bank who have expertise, but we'll also be able to draw on other banks, and importantly, also from the private sector. so this is a platform to bring
together the expertise to take what we know are bankable projects, but that without the kind of project preparation that will make it clear that they're bankable projects, investments won't flow. so we're looking forward to drawing on expertise from all over the world, but also from inside the world bank group. 'll take the back there. >> your protection is to ensure -- >> identify yourself, please. >> i'm from nigeria. sub saharan africa is to grow above 5% with some country like nigeria growing at 6%. we know too well that a whole lot is passing on. the growth rate is important on the efforts of world bank to encourage countries to end
poverty. thank you. >> i'm not sure what the question was. i'm sorry. >> ok. what i'm saying is, given the impressive growth rate in sub saharan africa, to what extent is it important on the effort to end abject poverty? >> the question is, to what extent is the growth rate in africa impacting poverty, ok. this is an important question. you know, in 1990, the number of people sitting in extreme poverty in east asia and in africa was about the same, 55% or so. in east asia, it's dropped to less than 10%. but in africa it's remained at 46%. and so one of the things that has been a bit of a disappointment is that poverty rates have remand high despite high growth rates. and so very specifically, in africa, we're working with countries to ensure that these high growth rates are
translated into lowering levels of extreme poverty. for example, many african countries have had new discoveries of natural resources, minerals, oil, for example. and what we know in so many cases, these discoveries don't lead to direct benefits for the poorest. and so this is one of our most important priorities. we want to ensure that we work with african countries to take these new, wonderful, important discoveries of mineral royals, of oil wells, and translate that into reduced levels of poverty. i can tell you that every one of the ministers of finance i speak with in africa are very committed to reducing extreme poverty and making sure that prosperity is shared. we need to just provide the kind of technical expertise, solution from around the world that will help them do that. >> the purple here.
>> thank you. >> i have a question regarding ebola n. your remarks, you mentioned the new assessment of the region. i wonder can you elaborate on what. in what aspects do you think there might be a spillover effect all over the world? thank you. >> so one of the things we did, our economists, we're looking at what were the impacts economically in previous he dim i can. one of the thing was sars. what we learned is the impact of sars, which was a tragic outbreak, 800 deaths, but the overall economic impact was far greater than just the impact of the virus. it was $46 billion. the impact, 80% to 90% of the economic impact is not from the virus itself, it's from the aversion behavior, the fear factor that surrounds an outbreak.
now, what we know is that the one thing that will stop that aversion behavior and lessen the economic impact is to have systems in place so that responses are quick and effective. one of the things we talk about this morning is that we now know exactly what it will take not only to stop the virus, but stop the aversion behavior that leads to this huge economic impact. that's really good news in a sense, that doing the right thing not only identifying cases, doing safe burials, but providing treatment for the people who are ill, and doing it even at the community-based level, which is what was called for today, all those things are the right thing to do for the liberian and a air lee own people. it's the right thing to do to prevent the spread from a public health perspective, and it's also the right thing to do to stop the fear that causes the enormous economic impact. so this morning, what we did is
everyone redoubled their commitment to acting right now to get those adequate treatment, prevention, identification systems in place on the ground in those countries. this is a point that we really want to make. are there other spillover effects? we're hearing with the two workers who died in spain, plus maybe one or two new invections that have happened, that we're already seeing an economic impact. the value of companies and airlines have already taken a hit. i can tell thaw that will continue unless we get the adequate response in place in those three countries. you have to stop these epidemics at the source. trying to block your borders or isolating those countries somehow is not going to work. i was encouraged this morning, but there's still a lot of work to do. one of the message that is came out very strongly is if anybody, any country, any
private sector group would like to make a contribution, they should do it now, want wait two or three weeks, because the price tag goes up every day that we delay. >> i'm from bloomberg news. dr. kim, can you clarify the $32.6 billion, what geography that covers. does that cover western africa? >> yeah, it's western africa. it's western africa and the surrounding countries. i can give you a list of exactly what countries. and it's looking at what will happen if the cases begin to spread. and the thing that, the point that we were making is that right now, as long as it's not under control, as long as -- let me put it this way. right now, because we don't have adequate treatment
services and, you know, if you think about it from the perspective of from guinea, sierra leone or liberia, the public health, the public health imperative is to stop the spread. but the human imperative, the individual human imperative is to get treatment. so the incentive right now is to go wherever you need to go to get treatment so you can live. right now we don't have the services in place so that the first thought of the people from those three countries is i need to go to my local clinic, because i know they'll take care of me effectively. that's what we need to do. now, the presumption of the $32.6 billion is things get delayed and delayed and delayed, and the people inside those countries do the rational thing for themselves and try to find care elsewhere. that's where the real impact is going to happen f. we see this kind of impact already with two, maybe four, four cases in spain, twhean historically this
aversion behavior, this fear factor can spread very quickly. >> clarify, do you have a global figure at this point? >> not yet, not yet. >> we're going to take time for two more questions. in the back there. >> thank you. held a on tuesday you sort of employee viewsed town hall meeting to hear concerns and questions from staff about the ongoing reforms at the world bank group. what was your biggest takeway from that meeting, and do you expect that it will lead to any concrete changes in either the implementation or communication of your reforms? and then sorry, just a quick second question. you're undergoing a strategic staffing exercise to map staff -- to match staff to the global practices. how do you know where expertise will be required before you've seen demand for your services
under the new organizational structure? thank you. >> thanks, michael. first of all, we're undergoing the most thorough, the most ambitious reorganization in close to 20 years. so it's not a surprise to me that there's anxiety, that there's concern. more than anything, what the staff were saying was that they wanted to talk to me directly. they wanted to tell me what the problems are that they were seeing. and i was aware of some of them. there were some that were new to me. but we had an extremely good discussion, and my takeway from that, the most important takeway, the thing that kept coming up is that they want to talk to me more, so we'll have another town hall next week, and we'll do as many as we need until people feel that they're being heard. now, this is what happens when you try to reorganize a multilateral institution. i've done reorganizations before. but the complexity of this institution is just enormous. there's 188-member governments.
we work in many, many different languages, so many different countries. on the one hand, i'm not surprised. but i would also point out, look at all the things that we've already gotten done. for example, we have been able to double the capacity for our lending to middle income countries. we had a record replenishment last year. already the global practices are providing information and support, for example, the prime minister in india, he tweeted out immediately after my meeting that they don't need our money, but we're going to be their information bank, and the reason is because we were able to provide him such interesting insights into how we can bring solutions to his problem. so there are a lot of good things about it already, but any time you undertake something this enormous, you're going to have these kind of problems. now, in terms of a strategic staffing, we know a lot from what we've already been doing, so we have some ideas about the kinds of staff that we will need and won't need. but what i would like to stress
is that the expenditure review we're going through, this is stuff you have to do as an organization no matter what, and we haven't done it. we haven't been doing it for quite a few years. so when you start the process of asking questions like, what are we spending on different things? are we spending the same amount to do something here as we're doing over there? when you're asking those questions for the first time, it is really tough to go through. but it's just something that every organization should go through. every organization should ask itself, do we have the right staff, and are we fit for purpose for what we're trying to do? i am glad that we've done it, and will continue, and the good news is that we're almost done. we're going to be finished soon. >> ok. looking for some gender balance. >> thank you so much. on the chinese economic slowdown, it has now almost been a year after the chinese
government carried out a slew of measures in order to make the economy more stable, so what is your evaluation on those reforms that have been carried out so far, and how would you integrate the slowdown? do you take them as cyclical changes, or do you take them as changes brought by those reforms? thank you. >> china is trying to undergo a massive change in their growth model, and this is something that my predecessor i think worked truly brilliantly with the chinese government over several years to put together a plan called china 2030. so if your intention, china going from some of the highest investment rates that we've ever seen, 46% of g.d.p., and then to try to pivot to a growth strategy that's much more focused on consumption and services, to try to sort of move up the value chain, if you will, in terms of economic productivity, this is a very difficult thing to do. and so we have been watching
very carefully, and there has been a slowdown from traditional rates of very high growth rates of 10%, and i think the important thing we watch is china continues to be committed to that reform process. we believe that that reform process and moving toward a different growth model is what china needs to do. and so it's -- it's a very delicate balance. they have to on the one hand be ready to move to a different growth model, but on the other hand, try to keep growth rates up, because you need the growth for new jobs, new entrants in the market. we have faith in chinese leadership. we think that they are -- they very clearly understand these tradeoffs. we will continue to work very closely with them. for example, one of the things that -- after the china report, the chinese government has continued to ask us to help them solve their most difficult
problems. so last year we launched a report on urbanization. as an example behalf a global practice is able to do -- as an example of what a global practice is able to do, many different global practices got together and said what are the best models in the world and in china for how china can handle the next 300 million people who are coming into the cities. china will be the first country in the world that has one billion urban dwellers, and so we looked at everything from how to reform the system, how to provide health and education in the cities, how to provide clean energy, how to increase the density of cities so that we lower the carbon footprint. and china is now undertaking the recommendations that we came together jointly to provide. right now, we're working on an assessment, a plan for their healthcare system. china spends 5% of g.d.p., which is a huge amount. but they're not happy with the
amount of health improvement that they're getting for this expenditure. this is so healthy for a country to be able to say we want to do better in a particular area, and we think that if we can help them to make the most of their current expenditures and make those ex-pent tours as efficient as possible so that we actually have healthier people, that this will be also a way to spur economic growth. it's difficult for many people to watch china have lower owth rates, but we feel that they're doing it in a way that's very much with tremendous awareness of what they're trying to accomplish. >> thank you very much. we'll be putting out a transcript later today for you. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> international monetary fund managing director christine
lagarde also spoke at the world bank i.m.f. conference in washington, d.c. her remarks focused on the i.m.f. reform package awaiting action in congress. this is 45 minutes. >> good morning everyone and thank you for coming today. and welcome to our 2014 annual meeting. we look forward to your questions this morning. i would ask you to be brief and we can try to do as many as possible. let me introduce to you this morning are managing director madam christine lagarde and we have with us our first deputy managing director david lipton. without further ado let me turn to the managing director for some opening remarks and then we
will come to your questions in the room. please identify yourself before asking the question. >> good morning to all of you. i hope you all are well and i would like to welcome you but include you in wishing this institution a happy birthday. it's seven years old and have brand-new relevant energized machine i can assure you. i will say a few words about the current economic outlook as we see it for those of you who have not followed previous press conferences by our terrific team and i would like to say a few words about the institution first. as i said it is 70 years old, founded in 1944 and i believe that it is not only relevant but in a position to respond to the challenges that the world is facing.
as a sign of that i would like to mention a couple of examples. i said this morning in the presence of a lot of the members of the community working in trying to help the three west african countries that are plagued by a boa i said it's absolutely fine if those countries increase their fiscal deficit. david was a bit concerned actually and i'm sure that we have some colleagues that would be a bit concerned but it's just an indication that we are capable of mobilizing resources. they are not grown and others will have to put in significant numbers. there are also capable of revisiting traditional standards. we have done the same this year concerning some of that
restructuring. as you know this is a model we have studied where we have come up with proposals, revisions of certain sovereign bond issues and we will continue to work on those issues. in the same vein we are also helping the fsb following up monitoring and helping with profound changes and regulations applicable to the financial sector. there are areas where we were not expected and at the age of 70 it's not bad to actually look at the fiscal side of climate change and what can be done about it and we have made proposals concerning removing subsidies in a socially responsible way. we have made proposals concerning price-setting and including externalities in the
price of fossil energies. also responsible in my view to assess the sustainability of growth in light of strongly increasing inequalities becoming excessive and therefore likely to have growth and it is not irrelevant either for the imf to look into growth and jobs and the inclusion of women in the job market. now those are areas that some might argue are not absolutely core business and yet we pretend that it is part of partial of the imf to look at issues that are macrocritical but touch on topics that we are facing that in many ways can be more acute. in addition to that we do all
the normal things that we have to do. so sir vance, the intersection of the two, of course lending, of course and we have done more lending then maybe might have been considered. we extended a significant -- to ukraine earlier this year. we are negotiating with a couple of african countries that are looking at support. the arab countries in transition are also major client of the funds. and the third areas where business is expanding if i may say as technical assistance, capacity building and training. we have opened our fifth training center this year and technical assistance is an area where there is massive massive
demand from all corners of the membership. so it's with that background that i wanted to wish us a happy 70th anniversary. now moving to the more traditional comments that you might have expected from me. for those of you who have seen the world economic outlook or watch the press conference as you well know we have trim their forecasts for 2014 and 20153.3% in 2014, 3.8% in 2015 and what we have noted clearly is more and more countries specificity in the cup knowledge that we work. it's not emerging market economies where recovery would be lagging behind. within each group, some countries are ahead and others are lagging behind. the advanced economy clearly the
recovery strip him by the united states in the united kingdom where japan is lighting behind an emerging economies you have reasonably strong although slower growth out of china, better than what we had out of india and clearly a major slowdown in countries like brazil and russia. so very country specific and by the same token the low income countries are thriving. on a much smaller base granted that their growth rates are very impressive which is what makes the current epidemic ebola even more threatening because it might certainly jeopardize economic recovery was underway and entail a decline of those
economies. that would be wasting the gains that they have earned as a result of their effort. so in the face of what we have called the risk of a new mediocre where growth is low and uneven, we certainly believe that there has to be a new momentum and that is what we'll be discussing with the membership in the final days. i believe that you have received the global policy agenda a copy of which i have here somewhere. you have perceived that, right? so this is the document that encapsulates for the membership the strategic direction of the work that we will be discharging over the next 12 months. this is the document on which we seek their approval and their support. now this new momentum with hopefully more growth, more jobs, better growth and better jobs is what we would certainly
call upon the membership to produce. what does it mean in practice and i will very quickly touch on the three key topics. the first one is monetary policy where we will be seeing movements probably but we believe particular in the eurozone and japan more of that monetary policy is needed going forward in order to support the economy. while at the same time the fed is probably going to normalize its monetary policy and where we are going to continue to caution a lot of the emerging market countries and low-income families in developing countries to prepare themselves for a bit more volatility than we have observed over the last human spirit in on the fiscal front we believe that more growth friendly physical policies can be put in place and those of you who have followed the press conference of the new head of
the fiscal affairs department and you will understand what they mean by pointing to the potential labor reforms and fiscal policies adjusted to support job market reforms which we believe could make a lot of sense we also think that the financial policies must continue to aim at producing excesses, make the financial system sounder and strengthen its ability to help the recovery. now there is a third package that we have been referring to regularly which is the structural reforms and we don't believe that the structural reform is the third chapter. by the way we believe it's very important that it has to be country specific. at the juncture of demand and
supply-driven measures, we have strongly held the views that infrastructure and investment infrastructure can be a good way to support growth in the short term by putting it to work by launching major construction efforts or maintenance jobs but can also impact on the supply-side in the medium term by facilitating and accelerating the creation of value down the road. so this is in a nutshell what we are focusing, what we hope to discuss the next few days. i would be very happy to take questions together with david on any topic that you would like to ask questions about. thank you. >> thank you madam lagarde. let's begin right here with this lady. you had your hand up. >> i was wondering in your global policy agenda you said your analysis of the world looks
uneasily familiar and a lot of your advice has been you have been seeing it for the past three years or more since the crisis countries need to do the structural reforms and it looks like fiscal and monetary policy has reached some of their limit and that is why we are turning to restructure spending. would you agree with that analysis india think countries need to step up their game? thank you. >> we strongly agree and we hope to convince those countries to satisfy the various conditions. it's not investment in infrastructure at any rate under any circumstances. it's clearly beneficial and we believe that it can be not only growth friendly but he then got if it's done under the right conditions so that it picks up from there with financing situation that continues to be very accommodative and very low cost and we clearly have a need
for infrastructure. on that basis we believe that it is helpful and as i said it addresses both the demand in the short term and the supply-side of the economy. structural reforms, yes we have said that and in a way it's the common factor to many of the countries in the various regio regions. though what we are seeing is that they have to be country specific. they have to be well-adjusted to the political of the accessibility, the multiplying effect that it can produce on those economies but it's a question of doing it. not just talking about it. we can talk and we can publish reports and we will continue to do so and we will be as -- as we can although it's not necessarily our domain of confidence.
other institutions can do that better but we can certainly incorporate with them and number two continue to bring forward the question. the question of getting on with the job and doing it. >> yes sir right in the front row. >> hello. i'm with ap and according to the data released this week by the imf china will overtake the u.s. in terms of gdp. how challenging it -- is it for the imf and do you think the legitimacy is at risk and the imf would have to go beyond the 2010 reforms that is currently in tax? thank you very much. >> the reform is an absolute must. it has to be implemented and
everybody knows that it is currently stuck before the u.s. congress. we very much hope that the different branches of the u.s. authorities and members of the legislative members themselves will understand the relevance of having an i that is representative of the global economy and includes the people that should sit at the table. now, this has not happened. it was during 2012. it's overdue in 2014 and i strongly hope that under president obama's leadership and with the right understanding of the parties the role of the eye at math words that.
who was first on the job concerning ukraine? the i. who managed to disperse very quickly and put cash in the bank's of guinea, sierra leone and liberia? not to say that others are not doing the job but we are capable of dealing with crazy situation of that nature like no institution. now, i'm not finished. [laughter] i also want to say that notwithstanding that the reform has not been ratified we as management include a representative china. one of the deputy managing directors plays a full part of the management and we are delighted that he is sitting at the table with us. within the teams we have a lot of the underrepresented staff
members and heads of departments. the head of the i is a chinese national. you were talking about china in particular but i would like to enlarge the topic to say that those underrepresented in the quota are not underrepresented necessarily in the management circle and at the highest level and we certainly pay as much attention as we should to all and not just to the big players. >> i'm going to stay down here. the lady in the front row. >> we have seen a lot of countries speaking with the imf african countries and specific even working with the imf with regards to technical assistance. some have issued bonds tapping into international bond markets. to what extent do you think african countries are capable of pumping that into the right
infrastructure projects are not making the same mistakes of the past given the history of the conflict's? >> you are right in that quite a few african countries have lately issued sovereign bonds and have been very successful which is fine that there is progress, there is more stability, they are more reliable borrowers probably is seen by the financial markets. i think it should be done with measure like everything. no excess, no abuse and i would like to point out to you that we are currently working within the fiscal affairs department on specific research work to actually focus on how public finance, how civil service in each country can actually well
served the discharge of major infrastructure projects and we will make that expertise available to the australian presidency of bayji 20 and to all our members of course to make sure that they appreciate how good management of public finance for good governance of public finance and how focused project management can be in order to serve the efficiency of infrastructure. this is what we have advocated. it will work if it's efficient. it will be efficient if it is well handled by those in charge and there's a way to do that. >> yes, with the glasses, yes. >> good morning. my question is -- about greece
to handle its phantom situation. ase in point.c to decide what it wants and how to handle its kind of situation. there have been improvements. order toward, and in deliver a continuous satisfactory outcome, the country will be in a better position if it had precautionary support. we are talking about evolution .n the relationship we believe that the relationship can still be extremely helpful andthe country to move on ultimately on its own. we are ready to help. we believe it could be effective.
with the safety before the pour. but still needs to be done. and for what they have done so they have to do continue. and there is a strong delegation coming from egypt. and i very much hope we could do article for with the egyptian friends. and we continue to be engaged across the world with the support and the financial support as well.
identify as up cloud on the horizon of the global economy. so the modest growth of that area but own a part of the attributable that we see in that part of the world. so i would hope i see a result of the investments the goes hand in hand with give-and-take with better growth in that part of the world.
>> i am with hong kong phoenix tv. with the federal reserve monetary policy as it has indicated relying on the economy's that we also see the federal reserve had global growth. for the interest-rate. thank you. >> i cannot predict what the fed will do i also believe that chairman yellen is given very clear and
understandable explanation about the monetary policy of the fed. so we could all be the same thing and what it is meant by what she says. and aunt we have also seen delivery of what she message to. from six months ago. but the other question dealt with others. in the areas to do christ a lot of work the outcome of what we call of remember back in may and june 2013? changing the monetary policy of the fed with the outflow
and including in the communication to find out she was paying attention to both. >> i with a guardian. talk about the it does -- the year ozone, we have been here before so how close is that to becoming the new japan? >>. >> it has been commented upon about what year-ago noticed of low inflation which is one of the attributes of what you describe of near japan.
so low inflation was the risk and we identified that with the ec to reverse the risk. and more we hope will be done. and we have also alerted through the risk of recession and that is identified as a probability it a rare between 35 and 40%. but there is a serious risk if nothing is done. but we say also if both do what they have to do.
impact on the economy. so what are the a their sources approach that they turn to so what they could tap into because they continue to grow. and those measures could address the partner countries. thank you. >> if you did not get the translation, did you get it? it was the very comprehensive question from the peruvian colleague that peru will be hosting the
next meeting next october for the imf and world bank. then he asked question about the current economic situation of peru that is the economy clearly marked by a industries and that exports which profit from their recent decline. and on behalf of our tradition and major construction and to be together under one roof. in the we are of looking forward to it. i can assure you. with the peruvian economy
with those policy measures that have been decided from the monetary standpoint to restore the situation. it is not easy from a political point of view. it will be focused and the policy mix. continuespaign 2014 with a week of debates. tonight, the wisconsin governors debate tween scott walker and larry barrick -- and mary burke. saturday, the iowa senate debate. sunday, the michigan governors debate between rick snyder and mark schauer.
more than 100 debates for the control of congress. >> next, "washington journal." a memorial service for former white house press secretary james brady, who died in august. live at 10:00 eastern. the house homeland security committee will hold a hearing in dallas-fort worth to hear from state, local, and federal officials about the response to the ebola hours. more about the ebola with lawrence gostin of georgetown university. then, steven cook on the role of turkey in the fight against isis. later, domestic violence in the u.s. with michael planty and
paulette sullivan moore. "washington journal" is next. ♪ >> it is 25 days until election 2014, 15% of americans are paying close attention. what about you? we went to hear what you think about election 2014. what are some of the issues important to you? some of the races you are following? what do you look for in a candidate. 585-3881 four republicans. 20